§ 5. Sir John FarrTo ask the Secretary of State for the Environment what proposals he has to include the banding of property values in assessing new methods of local government financing.
§ The Minister for Local Government and Inner Cities (Mr. Michael Portillo)Our proposals for eight bands of property values are set out in the Local Government Finance Bill.
§ Sir John FarrWhen making his assessments and calculations and increasing local government taxes, will my hon. Friend bear in mind the fact that those who live in larger properties are not necessarily able to pay more than people who live in much more modest surroundings?
§ Mr. PortilloAn integral part of our arrangements is, of course, limiting the tax ratio, so that people living in more expensive properties pay more than those in cheaper properties, but not too much more. The maximum that can be paid in the most expensive property in a given area will be three times the amount paid in the cheapest. That is in marked contrast to Labour's proposals: Labour wants to return to an "envy tax", forcing those living in more expensive properties to pay exorbitant amounts. That is what happened under the rates.
§ Mr. SalmondCan the Minister confirm that my calculations are correct? Under the banding proposals for the new council tax, is the Secretary of State for the Environment likely to pay about £270 for his central London accommodation? That is rather less than the 435 amount likely to be paid by a young couple of first-time buyers in Aberdeen, who will probably pay £280 for a £35,000 house or flat.
If those calculations are correct, will the Minister ask the Secretary of State whether he mentioned them in his speech yesterday evening in Aberdeen?
§ Mr. PortilloPeople who live in local authorities that spend prudently will have lower council tax bills than those who live in authorities that spend less prudently. If my right hon. Friend has a residence in Westminster, he is likely to benefit from the low-spending policies of that excellent council, under the community charge, council tax or any other system.
§ Dame Elaine Kellett-BowmanWill my hon. Friend bear in mind the problems created for tenants, forestry workers, estate workers or clergymen who live in tied houses that are bigger than the houses that they would normally be able to afford and whose incomes are not reflected in their banding? This is a serious matter and I ask my hon. Friend to take note of it.
§ Mr. PortilloI appreciate what my hon. Friend said. I have a feeling that we shall have considerable discussion about such issues when we debate the Local Government Finance Bill in Committee. That is one reason why I am so keen for the time for discussion to be allocated sensibly, allowing all such serious matters to be discussed fully.